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Complete this assignment using Microsoft Excel and submit it below. Please submit it as a single file. Assignment Perform financial analysis for a project using the format provided in Figure 4-5 in the text. Assume the costs and benefits for this project are spread over four years as follows: • Estimated costs are $200,000 in Year 1 and $30,000 in Years 2, 3, and 4. • Estimated benefits are $0 in Year 1 and $100,000 each year in Years 2, 3, and 4. • Use a 9% discount rate, and round the discount factors to two decimal places. Create a spreadsheet to calculate and clearly display the NPV, ROI, and year in which payback occurs. Based on the financial analysis, please write a few lines on the spreadsheet explaining whether you would recommend investing in this project. (Tip: Use the spreadsheet format given and limit the table to 4 years. The discount factors should start with 0.92 in year 1.)

Complete this assignment using Microsoft Excel and submit it below. Please submit it as a single file. Assignment Perform financial analysis for a project using the format provided in Figure 4-5 in the text. Assume the costs and benefits for this project are spread over four years as follows: • Estimated costs are $200,000 in Year 1 and $30,000 in Years 2, 3, and 4. • Estimated benefits are $0 in Year 1 and $100,000 each year in Years 2, 3, and 4. • Use a 9% discount rate, and round the discount factors to two decimal places. Create a spreadsheet to calculate and clearly display the NPV, ROI, and year in which payback occurs. Based on the financial analysis, please write a few lines on the spreadsheet explaining whether you would recommend investing in this project. (Tip: Use the spreadsheet format given and limit the table to 4 years. The discount factors should start with 0.92 in year 1.)

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 18M
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Complete this assignment using Microsoft Excel and submit it below. Please submit it as a single file. Assignment Perform financial analysis for a project using the format provided in Figure 4-5 in the text. Assume the costs and benefits for this project are spread over four years as follows: • Estimated costs are $200,000 in Year 1 and $30,000 in Years 2, 3, and 4. • Estimated benefits are $0 in Year 1 and $100,000 each year in Years 2, 3, and 4. • Use a 9% discount rate, and round the discount factors to two decimal places. Create a spreadsheet to calculate and clearly display the NPV, ROI, and year in which payback occurs. Based on the financial analysis, please write a few lines on the spreadsheet explaining whether you would recommend investing in this project. (Tip: Use the spreadsheet format given and limit the table to 4 years. The discount factors should start with 0.92 in year 1.)
Transcribed Image Text:Complete this assignment using Microsoft Excel and submit it below. Please submit it as a single file. Assignment Perform financial analysis for a project using the format provided in Figure 4-5 in the text. Assume the costs and benefits for this project are spread over four years as follows: • Estimated costs are $200,000 in Year 1 and $30,000 in Years 2, 3, and 4. • Estimated benefits are $0 in Year 1 and $100,000 each year in Years 2, 3, and 4. • Use a 9% discount rate, and round the discount factors to two decimal places. Create a spreadsheet to calculate and clearly display the NPV, ROI, and year in which payback occurs. Based on the financial analysis, please write a few lines on the spreadsheet explaining whether you would recommend investing in this project. (Tip: Use the spreadsheet format given and limit the table to 4 years. The discount factors should start with 0.92 in year 1.)
Present Value Analysis (3 of 4) Discount rate 8% Assume the project is completed in Year 0 0 Costs Discount factor Discounted costs Benefits Discount factor Discounted benefits Discounted benefits - costs Cumulative benefits - costs ROI 1 140,000 40,000 1 0.93 140,000 37,200 Year 2 3 Total 40,000 40,000 0.86 0.79 34,400 31,600 243,200 0 200,000 200,000 200,000 1 0.93 0.86 0.79 0 186,000 172,000 158,000 516,000 (140,000) 148,800 137,600 126,400 272,800+NPV (140,000) 8,800 146,400 272,800 112% Payback in Year 1 FIGURE 4-5 JWD Consulting net present value and return on investment example
Transcribed Image Text:Present Value Analysis (3 of 4) Discount rate 8% Assume the project is completed in Year 0 0 Costs Discount factor Discounted costs Benefits Discount factor Discounted benefits Discounted benefits - costs Cumulative benefits - costs ROI 1 140,000 40,000 1 0.93 140,000 37,200 Year 2 3 Total 40,000 40,000 0.86 0.79 34,400 31,600 243,200 0 200,000 200,000 200,000 1 0.93 0.86 0.79 0 186,000 172,000 158,000 516,000 (140,000) 148,800 137,600 126,400 272,800+NPV (140,000) 8,800 146,400 272,800 112% Payback in Year 1 FIGURE 4-5 JWD Consulting net present value and return on investment example
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